TheDeal: KKR Invests $200 Million in India's Gland Pharma

KKR may be making the largest ever private equity investment in the Indian subcontinent's health care sector.

NEW YORK (TheDeal) -- New York buyout firm Kohlberg Kravis Roberts & Co. (KKR) has agreed to take a minority stake in generic drugs maker Gland Pharma Ltd, paying $200 million in what is reportedly the biggest ever private equity investment in the Indian subcontinent's health care sector.The investment includes an injection of new money and also provides for a full exit for Evolvence India Life Sciences Fund. The seller is a Mauritius-based investment vehicle of Dubai's alternative assets manager Evolvence Capital.

It was not immediately clear whether another existing investor, pre-filled syringes specialist Vetter Pharma International GmbH, of Ravensburg, Germany and Stokie, Ill., is also selling all or part of its stake. Gland Thursday, Nov. 28, thanked the Vetter family for "inspiring" the company in the niche field in which both work.

Hyderabad-based Gland Pharma develops and manufactures generic injectable pharmaceuticals, primarily for the U.S. market. Established in 1978, it says it was the first Indian company to receive Food and Drug Administration approval for injectable liquids. It also pioneered Heparin technology in India.

As well as Heparin and other anti-coagulants, it manufactures active pharmaceutical ingredients and injectable formulations for conditions including osteoarthritis and areas including gynecology and ophthalmology.

Gland said it will use KKR's investment for product development, as well as growing its manufacturing base.

"Our partnership with KKR will help us in our next phase of growth, as we look to materially expand our manufacturing capacities and invest more in our development work," Gland Pharma founder and chairman Ravi Penmetsa said in a statement.

Gland Pharma is KKR's second investment in India in 2013. The previous investment was the acquisition of a controlling stake in Alliance Tire Group from Warburg Pincus LLC, in a deal valued at $650 million. It is also the fourth investment from its KKR Asian II Fund.